A Report About Public/Private Partnership Approaches In Recreation Service Management

EXECUTIVE SUMMARY (Primary contact for full report - Parks and Recreation Ontario)

Submitted by: THE JF GROUP In association with: IER-PLANNING, RESEARCH AND MANAGEMENT SERVICES

This report reflects research contracted by the Ministry of Citizenship, Culture and Recreation and does not represent policy of the Government of Ontario OCTOBER 1997

A REPORT ABOUT PUBLIC/PRIVATE PARTNERSHIP APPROACHES IN RECREATION SERVICE MANAGEMENT

October 1997

EXECUTIVE SUMMARY Municipal recreation departments are experiencing significant pressures to adopt new forms of service delivery, generally caused by reductions in traditional forms of funding and changes to principles guiding resource deployment. While public/private partnerships (PPP's) within municipalities are not new, there is growing interest in these types of arrangements as public officials confront the challenges associated with increased service demands, expectations for higher efficiency, and no public tolerance for tax increases. Leisure services departments have recently become more involved in discussions with private interests about partnerships, joint ventures, and operating agreements, yet have limited applicable information or precedent upon which future directions can be logically based. To meet the need for a more thorough understanding of the implications of public/private partnerships in recreation service management, the Ministry of Citizenship, Culture and Recreation commissioned a study with the following objectives: •

that Ministry staff become better informed about current and past practices of municipalities in managing approaches involving the private sector in the provision recreation services;

•

that relevant information could be used by stakeholders to help promote a movement towards efficiencies in the operation and management of services;

•

that additional necessary skills and tools be identified to assist the recreation sector more successfully manage change; and

•

that the private sector be provided with results and expectations of current and future practices.

A workplan was established to investigate recreation facility and leisure service examples of public/private partnerships from communities across the province. While this did not involve an investigation of the prevalence of PPP's, the study did provide sufficient material to establish the basic and current status of the public/private partnership environment in the field of recreation.

A REPORT ABOUT PUBLIC/PRIVATE PARTNERSHIP APPROACHES IN RECREATION SERVICE MANAGEMENT

No current examples

October

Facility

Concessions

Facility Management and Operations

Design, build, lease transfer

Operations

Departmental and Facility Management

CURRENT ACTIVITIES AND RELATIONSHIPS

Most municipalities recognize the need for new approaches in recreation service management. According to a national survey completed by the Canadian Council of Public/Private Partnerships (CCPPP), 55% of the country's recreation departments expect to engage in some form of public/private partnership by 1998. The MCZCR study results support the findings of the CCPPP research, with most municipal representatives expecting relationships with private enterprise to be increasingly important in future operating profiles. Private sector interests seem to be most interested in revenue producing relationships and therefore large multi-dimensional projects or management contracts involving facilities and programs that produce user fees are frequently explored. Municipal representatives expressed concern that without some balance between the types of relationship within which private partners become involved, departments could forfeit the revenue producing elements of recreation operations, leaving only those requiring subsidies under municipal control.

< The JF Group & IER - Planning, Research and Management Services >

A REPORT ABOUT PUBLIC/PRIVATE PARTNERSHIP APPROACHES IN RECREATION SERVICE MANAGEMENT

October

Tolerance for risk is an important issue that affects most public/private partnership agreements. Not surprisingly, private enterprise expects to realize an elevated return on investment as the inherent risk of the project rises. Municipalities have expressed difficulty in accepting the risk/reward concept, which has become a stumbling block in certain negotiations. Irrespective of the difficulties associated with differences in philosophical approaches and expectations, new approaches in recreation service delivery are seen as inevitable solutions to the challenges currently facing municipal recreation departments, and many municipal officials believe that there is no option but to aggressively pursue future public/private partnership as one potential strategy.

PROCESS

Several municipalities have initiated partnered projects involving the private sector without a general framework or pre-established protocol to guide the process. This has, in certain cases, established an unfortunate precedence that has caused hardship in efficiently dealing with future potential PPP's. For this reason, many municipal officials expressed a strong desire for a standardized approach for the evaluation and selection of the most appropriate strategy. It is noteworthy that departments frequently have difficulty in describing the municipality's expectations for a contemplated private sector relationship, which is often reflected in poorly written Requests for Proposals. Finally, it is regularly expected for the process to move too quickly, which can compromise the project quality and negatively affect the benefits that should ultimately accrue to the municipality.

HELPFUL RESOURCES

Municipal and private sector respondents provided suggestions about additional resources that would be helpful in assisting the industry to more effectively respond to the emerging trend of developing public/private partnerships in the field of recreation. These include:

< The JF Group & IER - Planning, Research and Management Services >

A REPORT ABOUT PUBLIC/PRIVATE PARTNERSHIP APPROACHES IN RECREATION SERVICE MANAGEMENT

October 1997

Also, elected officials and senior decision makers must begin to acquire more knowledge about the phenomena, so that they can be sensitive to issues that confront recreation departments on a regular basis.

The leisure industry will greatly benefit from an increased understanding of the public/private partnership concept. A more thoughtful approach to decisions can be facilitated by greater access to tools and resources that could help in creating mutually beneficial public/private relationships in the future delivery of municipal recreation services.

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